Article: How to Create a Winning Employee Retention Strategy http://www.entrepreneur.com/article/print/0,2361,320272,00.

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How to Create a Winning Employee Retention Strategy

Keeping these four elements in mind will help your business hold on to the top people
on your staff.
March 14, 2005
By Paul Sarvadi
URL: http://www.Entrepreneur.com/article/0,4621,320272,00.html

A comprehensive people strategy is not comprehensive if it doesn't include a proven

retention strategy for holding on to the employees you've worked hard to recruit into your
company.

That may sound logical, but many, if not most, small businesses overlook this critical
component in their human resources program. In a recent Watson Wyatt survey, more than
50 percent of the responding companies said they didn't have a formal strategy for retaining
employees once they had been successfully recruited.

So why is that? I think the answer lies in a misperception about what factors actually drive
retention.

Most business owners and managers think retention is based on compensation issues--wage
and salary levels, incentives, and golden handcuffs--when in reality the drivers go much
deeper into the human psyche to the actions and attitudes that make employees feel
successful, secure and appreciated. As a result, a sound retention strategy should focus on
and tactically address four key elements--performance, communication, loyalty and
competitive advantage.

1. Performance. The benefit of having measurable objectives for employees is fairly

obvious to most business owners and managers, but this perception usually stops short of
relating performance metrics to employee retention. Study after study confirms that people
have a deep desire to feel they're succeeding and that their talents and capabilities are being
used in a way that makes a difference to the business. When people sense their actions are
fulfilling this desire, they begin to develop a sense of belonging and a feeling that your
company is their company.

Human beings are often the happiest when they're in the process of achieving a goal. Clear,
achievable objectives that gauge personal, team and company performance provide the
feedback employees need to confirm they're making valuable contributions and
accomplishing desirable goals.

2. Communication. The second essential element in a retention strategy is communication,

specifically a communications process that's structured to inform, emphasize and reaffirm to
employees that their workplace contributions are having an impact. Since we're dealing very
directly with how employees feel about their performance, the company and their work
environment, the question becomes, "How do you know how they feel about these matters?"

Properly done, communication with your staff will provide you with the insights you need in
order to know how your employees feel about working for your business. Do you
communicate on a frequent basis with your employees? Do you have regular meetings with
your people? Is it two-way communication, and do you have a nonthreatening channel for
them to offer comments and suggestions? Do you conduct employee surveys to gather
opinions on company issues and activities? Are your managers and supervisors good
listeners? An effective and sensitive communications plan can provide you with insight on
exactly what's driving employee morale and how your staff members feel about your
company.

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Article: How to Create a Winning Employee Retention Strategy http://www.entrepreneur.com/article/print/0,2361,320272,00.html

3. Loyalty. The third element in a successful employee retention strategy is employee

loyalty. True loyalty is not an enforced requirement but an earned response to the trust,
respect and commitment shown to the individuals in your company. When you demonstrate
loyalty to your employees, they'll reciprocate with commitment and loyalty to your business.
Remember that people don't begin their employment with you as loyal employees, but will
develop loyalty over time as they're trusted, respected and appreciated by you.

So how are you going to demonstrate your commitment to them? How loyal are you to your
employees? Are you more concerned about their success or their contributions to your
company's success? In actuality, these two considerations are not mutually exclusive but are
both essential and should work together.

4. Competitive advantage. The fourth and final element in your strategy to retain employees
has to do with your competitive advantage. While that may seem odd at first, think about it:
People want to work for a winner. What sets your company apart from your competition?
How are you--and as a result, your employees--making a difference in your industry, in your
community, and for your customers? Take the time to identify and inform your clients and
your employees about your unique competitive advantage. If your product is similar to others
in the marketplace, your service can be what distinguishes you (and probably should in any
case). People want to be with a winner...and that includes employees.

Together, these four elements can provide you with a retention strategy capable of producing
amazing results. You may even have some of them already in place, such as performance
metrics and a communications process. The key is to make sure you've integrated all four
elements into a strategy for retaining employees that's grounded in a genuine commitment to
serving your customers and employees well over the long haul.
Copyright © 2005 Entrepreneur.com, Inc. All rights reserved.

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